CRE Appraisals: Reviewing and Interpreting
An important part of the commercial real estate (CRE) lending process is the review and interpretation of the property appraisal. This program covers the major issues of the entire appraisal process, including a brief review of selecting and engaging a qualified appraiser, but focuses more on reviewing the report for integration into the overall credit analysis. Fundamental principles and features of commercial appraisals are covered, as well as the primary analytical techniques such as net operating income (NOI) for basic, income-producing properties. This class will also provide an overview of the 2010 Interagency Appraisal and Evaluation Guidelines, plus other practical issues that community banks face, including a brief look at high volatility CRE (HVCRE) .
- Why review appraisals?
- Types of reviews
- 14 review points from FIRREA
- What is FIRREA?
- Partial exemptions, full exemptions and minimum standards for the report
- A sample compliance review checklist
- Letter of transmittal
- Appraiser qualifications
- Types of appraisals by scope
- Types of appraisals by format
- Assumptions and limiting conditions
- Property identification and ownership interest
- Unique characteristics of the major types of real estate, and how these affect the appraisal
- Approaches to value
- How the cost approach works
- The direct capitalization method for the income approach: net operating income (NOI) concepts and understanding key variables of vacancy, management fees, replacement reserves and capitalization (cap) rates
- Direct sales comparison
- Reconciliation of values and value conclusion
- A sample technical review checklist
- Outside/third party
- How appraisers self-regulate via the Uniform Standards of Professional Appraisal Practice (USPAP) and state licensing
- Getting another appraiser to do the review under USPAP 3 guidelines and sample review comments
- Appraisal review outcomes: When to request revisions
- Using your analysis to validate existing or older appraisals, with a suggested format for documenting your conclusions
- Brief overview of guidelines for evaluations when an appraisal is not required
Richard Hamm has been training bankers for 26 years, designing and delivering courses specializing in commercial lending and credit, including portfolio and risk management, commercial real estate (CRE) and appraisals, plus selling and negotiating skills, and director training. His clients include:
- National associations such as the American Bankers Association (ABA) and the Risk Management Association (RMA)
- Regional banking schools such as the Graduate School of Banking at Colorado and other major schools
- State banking and community banking associations in ten states
- Plus individual banks
He is based in Huntsville, AL and has owned/operated Advantage Consulting & Training for 12 years, after a 22-year banking career including senior positions in lending and credit, plus president during the formation of a community bank. He has BS and MBA degrees from the University of Alabama.
8:30 a.m. Registration & Continental Breakfast
9:00 a.m. Program Begins
12:00 p.m. Lunch (included)
1:00 p.m. Program Resumes
4:00 p.m. Program Adjourns
Indiana Bankers Association
8425 Woodfield Crossing Blvd., Suite 155E
Indianapolis, IN 46240
$225 IBA Member
$155 Each Additional IBA Member
Participation in IBA programs is limited to members, associate members, and nonmembers from an eligible membership category at
CRE lenders, commercial lenders, credit analysts, mortgage lenders, private bankers, small business lenders, loan review specialists, special assets officers, lending managers and credit officers involved in the CRE lending process. Also intended for support personnel involved in the ordering and reviewing of commercial appraisals.
Marcy Borden, Education Coordinator: email@example.com
You will receive an e-mail confirmation at registration. If you have questions, contact Marcy Borden at 317-387-9380 or via e-mail at firstname.lastname@example.org.
Within three or more business days prior to the day of an educational program, no cancellation charge will be assessed. Within two days prior, 50% of the fee is assessed. Refunds are not provided for cancellations the day before or absences on the day of the program. Substitutions are welcome at